ETFs Surging Past Hedge Funds in Total Assets

Econintersect:  Investing in ETPs (electronically traded products) are attracting assets at a much greater rate than are hedge funds.  For the period that covers 2012 through first quarter 2015, ETPs grew by almost a factor of 5 compared to hedge funds.  A research note from ETFGI, an independent research and consultancy firm, reports that the rapid growth of ETPs will result in that category of asset surpassing the assets in hedge funds when both approach nearly $3 trillion in assets during the current quarter.

From EFTGI:

We expect assets invested in the global ETF/ETP industry will surpass assets in the global hedge fund industry during this quarter. According to our analysis published on April 24th, assets in the global ETF/ETP industry reached a new record of US$2.926 trillion at the end of Q1 2015, while assets in the global hedge fund industry, according to a new report published by Hedge Fund Research (HFR), reached a record US$2.939 trillion.

Many people will find it surprising that the global ETF/ETP industry, which just celebrated its 25th anniversary on March 9th, has been growing at a faster rate than the global hedge fund industry, which has existed for 66 years.

John Lounsbury

Sources

• Research Note: ETF/ETP industry forecast to surpass hedge funds in Q2 (ETFGI announcement, 27 April 2015) Link to report pdf.

• Booming ETFs race past hedge funds (Financial News, 27 April 2015)